South Africa: Budget 2018 - VAT Is Increased - a First for New SA

Photo: Pixabay
New Dawn

For the first time in democratic South Africa value-added tax (VAT) is raised - by one percentage point to 15% as part of the "tough but hopeful" Budget Finance Minister Malusi Gigaba presented on Wednesday. The VAT hike is central in a set of tax increases, including higher estate and luxury goods duties and an extra 52 cents per litre in fuel levies, to generate an additional R36-billion for the national purse. The tax hikes come alongside R85-billion government expenditure cuts over the next three years to fund inclusive economic growth and social spending, from free higher education to health care and social protection. By MARIANNE MERTEN.

The increase in value added tax (VAT) to 15%, from 14%, with effect of 1 April 2018, is a tough political choice. Trade unions and civil society organisations are on public record opposing this option.

But Finance Minister Malusi Gigaba, speaking to media ahead of delivering his maiden Budget, maintained this was the right decision, and one with the least negative consequences for economic growth or social protection. And South Africa's VAT rate was still below peer countries like Argentina, Zimbabwe and Russia.

There would be talks with the trade unions once the...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.